Presentation: Analysts' Briefing

Title

Sound Strategy Backed by

Strong Capitalization

November 5, 2001

THESE PRESS MATERIALS ARE NOT AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES, SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION, AND ANY PUBLIC OFFERING OF

SECURITIES TO BE MADE IN THE UNITED STATES WILL BE MADE BY MEANS OF A PROSPECTUS THAT MAY BE OBTAINED FROM THE ISSUER AND THAT WILL CONTAIN DETAILED INFORMATION ABOUT THE COMPANY AND MANAGEMENT, AS WELL AS FINANCIAL STATEMENTS. "UNITED STATES" MEANS THE UNITED STATES OF AMERICA, ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES, AND THE DISTRICT OF COLUMBIA.

2



Top-line growth offset by conservative

provisioning



Strong asset quality and provision coverage



Stabilized interest margin and interest income



Improved efficiency in expense management



Non-interest income continues to shine

Ensuring strong capitalization and asset

quality coverage

3

Net interest income 513 588 14.7 472 24.6

Fees and commissions 131 174 32.7 133 30.8

Dividend & rental 12 15 25.0 28 -46.4

Other income 67 267 300.3 87 206.2

Operating income 723 1,044 44.4 720 45.0

Staff costs 178 244 36.7 177 38.1

Operating expenses 162 226 39.7 189 19.4

Total expenses 340 470 38.1 366 28.5

Operating profit 383 574 49.9 354 62.0

Loan loss provisions 26 246 NM 8 NM

Cash net profit 338 265 -21.6 308 -14.0

Goodwill 0 64 NM 0 NM

Net profit 338 201 -40.5 308 -34.8

Financial Indicators (%)

Net interest margin 2.05 1.78 0 1.71 4.1

Cost-to-income ratio 47.0 45.0 -4.3 50.8 11.4

Net interest income 513 588 14.7 472 24.6 Fees and commissions 131 174 32.7 133 30.8 Dividend & rental 12 15 25.0 28 -46.4

Other income 67 267 300.3 87 206.2

Operating income 723 1,044 44.4 720 45.0

Staff costs 178 244 36.7 177 38.1

Operating expenses 162 226 39.7 189 19.4

Total expenses 340 470 38.1 366 28.5

Operating profit 383 574 49.9 354 62.0

Loan loss provisions 26 246 NM 8 NM

Cash net profit 338 265 -21.6 308 -14.0

Goodwill 0 64 NM 0 NM

Net profit 338 201 -40.5 308 -34.8

Financial Indicators (%)

Net interest margin 2.05 1.78 0 1.71 4.1 Cost-to-income ratio 47.0 45.0 -4.3 50.8 11.4

Operating profit up 49.9% QoQ

(S$ million)

4

Dao Heng disproportionately contributed

to top line growth

(S$ million)

(S$ million) _3Q01DBS _3Q01DHB DBS excl_{DHB 2Q01}DBS _Change %

Net interest income 588 150 438 472 -7.1

Fees and commissions 174 51 123 133 -7.6

Dividend & rental 15 1 14 28 -50.0

Other income 267 22 245 87 180.6

Operating income 1,044 224 820 720 13.8

Staff costs 244 56 188 177 6.8

Operating expenses 226 50 176 189 -7.4

Total expenses 470 106 364 366 57.4

Operating profit 574 118 456 354 28.8

Loan loss provisions 246 24 222 8 NM

Cash profits 265 60 205 308 -33.4

Goodwill 64 0 64 0 NM

Net profit 201 60 141 308 -54.2

Net interest income 588 150 438 472 -7.1 Fees and commissions 174 51 123 133 -7.6 Dividend & rental 15 1 14 28 -50.0

Other income 267 22 245 87 180.6

Operating income 1,044 224 820 720 13.8

Staff costs 244 56 188 177 6.8

Operating expenses 226 50 176 189 -7.4

Total expenses 470 106 364 366 57.4

Operating profit 574 118 456 354 28.8

Loan loss provisions 246 24 222 8 NM

Cash profits 265 60 205 308 -33.4

Goodwill 64 0 64 0 NM

5

Original Estimate:

HK$540 million

Revenue :

HK$275 million

Cost:

HK$265 million

New:

HK$750 million

Revenue :

HK$450 million

Cost:

HK$300 million

6



Top-line growth offset by conservative

provisioning



Strong asset quality and provision coverage



Stabilized interest margin and interest income



Non-interest income continues to shine



Improved efficiency in expense management

Ensuring strong capitalization and asset

quality coverage

7

Prudent provisioning

DBS Bank - Loans - Equities - Others

Dao Heng Bank

DBS Kwong On Bank

DBS Thai Danu Bank (DTDB) DBS China Square

Others

Specific provisions General provisions

Total DBSH Group provisions

(S$ million)

(S$ million) _{9M00 9M01 Change}%

25 20 4 -19 22 16 82 (44) 38

263 132 123 8 24 13 12 16 21 349 (58) 292

947.9 554.7 2,653.1 NM NM NM (34.4) (26.7) 27.0 325.8 28.3 678.5

8

A significant portion of 3Q provision is driven

by September 11 attacks

Total 3Q provision exercise

- Loan related provision

- Mark-to-market provision for

marketable securities

(S$ million)

(S$ million)

246

146

100

Out of the S$100 million mark-to-market provision expense,

S$48 million was written-back after market recovery in

9

2,705 2,824 _{2,425 2,452}

1,735 _{1,610 1,486}

642 ₆₀₇

772

1,239

1,408 _1,365

1,144

624 ₆₀₆

1,735

2,874

3,018 _3,207

3,000

1,238

1,143

1,101

1,249 649

770 1070

1152 871

267

151 97

366

667

777 815

2.7%

11.8%

13.1% 13.0%

8.5%

12.7%

7.6%

6.2%

6.0%

NPLs fell to 6.0%

Dao Heng Bank

DBS Thai Danu Bank 5 Regional Countries Others

Singapore NBk NPL/NBk Loans (%)

(S$ million)

1,112

3,907

7,085

8,121 8,149

7,666

4,411 4,834 4,577

Dec 97

Jun 98

Dec 98

Jun 99

Dec 99

Jun 00

Dec 00

10

71% of NPLs are graded “Substandard”

Total

DTDB

Dao Heng

DKOB

Others

5RC

S'pore

1,207

5

2751,486

421

83

85 589

273

10

58340 158

103

7 268

290221266 777

903 191 1,101

7

3,251 445 881 4,577

Substandard Doubtful Loss 81%

71%

82% 1% 17%

71% 10% 19%

Of which 9% have never been

delinquent or defaulted

11

801 1,115 1,294 1,191 1,174 1,532 1,463 948 179 1,237 3,095 2,032 2,804 2,558 1,155 946 1,180 1,049

General Provisions (GP) Specific Provisions (SP) SP+GP/NPLs (SEC) (%) SP+GP/Unsec NPLs (%) SP+GP/NPLS (%) 980 1,894 3,147 3,852 4,286 3,978 2,286 (S$ million) 2,643 2,687

Provision coverage improved from 55% to 59%

Dec 97 Jun 98 Dec 98 Jun 99 Dec 99 Jun 00 Dec 00

Jun 01 Sep 01

146.5% 164.6% 119.6% 102.7% 110.6% 118.4% 114.8% 129.9% 54.7% 51.8% 51.9% 52.6% 47.4% 44.4% 48.5% 88.1% 59.9% 55.3% 63.0% 60.8% 61.4%

143.8%

62.9%

12

25.2%

67.3%

16.3%

38.5% 5.6% 3.8% 16.9%

59.1%

22.1%

37.7% 6.3% 5.4%

Singapore

Restructured / non-accrual

Regional countries

Restructured / non-accrual

Other countries

Restructured / non-accrual

Total

Restructured / non accrual NPLs under SEC reporting

Non-restructured NPLs / total loans

41% of NPLs restructured

Sep 00 Jun 01

32.5%

66.0%

18.2%

41.2% 5.5% 3.4%

13



Top-line growth offset by conservative

provisioning



Strong asset quality and provision coverage



Stabilized interest margin and interest income



Improved efficiency in expense management



Non-interest income continues to shine

Ensuring strong capitalization and asset

quality coverage

14

Margins stabilized at 1.78% in 3Q01

(S$ million)

Net interest income

Net interest margin (gross basis)

2.00% 2.04%

989 1,046 1,046

2.07%

1.97%

993

1H99 2H99 1H00 2H00 1H01

962

1.78%

1,176*

3Q01

1.78%

15



Top-line growth offset by conservative

provisioning



Strong asset quality and provision coverage



Stabilized interest margin and interest income



Improved efficiency in expense management



Non-interest income continues to shine

Ensuring strong capitalization and asset

quality coverage

16

9M00 9M01 _Change%

On track with target growth rate of YoY

17% expense growth

DBSH Group (excluding DHG)

Staff costs

Occupancy expenses

Technology-related expenses

Professional and consultancy fees Others

Non Dao Heng restructuring costs Total (excluding Dao Heng)

Dao Heng Total

Cost-to-income ratio (%)

(S$ million)

(S$ million)

460 110 99 54 211 934 -934 -934 42.2

567 120 121 44 250 1,102 11 1,113 106 1,219 47.4

23.2 9.2 21.9 (18.6) 18.5 17.9 NM 19.1 NM 30.5

17

Set to achieve 17% expense growth target

by end-2001

106

364*

366 382

0 100 200 300 400 500

1Q2001 2Q2001 3Q2001

17 19

26

0 10 20 30

1H2001 3Q2001 FY2001_Target 470

(S$ million) (%)

Cost containment program is producing results - Operating expenses (excluding Dao Heng)

have been declining steadily quarter-on-quarter

Year-on-year expense growth expected to meet management

target

18

88.3 87.4

85.5

86.5 87.6 89.6

14.4 17.1 86.0 0 25 50 75 100 Jan-01 Feb-01 Mar-01 Apr-01 May-01 Jun-01 Jul-01 Aug-01 Sep-01

% of txns processed ‘Straight Through

 _{Implementation of CRM & Interactive Voice}

Recognition will bring Contact Centre STP rates close to Global bench marks

 _{IDEAL & BBS-2000 Enhancements, will drive the}

Remittance Operations STP rates up to approximately 45-50%

 _{Cheque Truncation Scheme implementation in 2Q-02}

along with other initiatives will move the Clearing Operations STP rates closer to the 100% Mark

STP rates leap from 14% to 89%

5.5 25.3 40.0 16.1 0 25 50 75 100

Benchmark: Operations Council

Remittance Operations % T ra n sa c ti o n s p ro ce ss ed S tr a ig h t T h ro u g h

Bench Mark Dec 00 Mar 01 Sep 01

91.4 96.0 98.0 _93.5 0 25 50 75 100 Clearing Operations

Bench Mark Dec 00 Mar 01 Sep 01 23.2 75.0 8.8 0 25 50 75 100

Benchmark: Operations Council

Assumes full service IVR capability

Contact Centre % C al ls h an d le d b y IV R

Bench Mark Dec 00 Mar 01 Sep 01

% T ra n s ac ti o n s p ro ce ss ed S tr ai g h t T h ro u g h Bench mark: Int. research

Increasing straight-through levels improve

productivity

19

0.97 1.00

0.00 0.40 0.80 1.20

1.02 1.00

0.00 0.40 0.80 1.20

0.88 1.00

0.00 0.40 0.80 1.20

0.78 1.00

0.00 0.40 0.80 1.20

Clearing Operations - Inward Cheques Remittance Operations-Outward TTs

Trade Operations - Collections Remittance Operations - Cashiers Orders

Budget YTD (Avg) _Budget

(Avg)

YTD (Avg)

YTD (Avg) _Budget

(Avg)

YTD (Avg) Budget

(Avg)

(Index) (Index)

(Index) (Index)

20

181 100 199 0 70 140 210

2000 Mar 01 Sep 01

 _{Clearing operations : 5.25 Sigma}

 _{Account services : 5.00 Sigma}  _{Remittance operations : 4.25 Sigma}

 _{Clearing & Remittance Operations}

ISO-9000 Certified

Large Productivity Gains from

Centralisation & Re-engineering Remittance Operations

T ra n s ac ti o n s / F T E ( In d ex ) Clearing Operations Contact Centre T ra n s ac ti o n s / F T E ( In d ex ) Process Quality Tr a n s a c ti o n / F T E ( In d e x )

Processing & Servicing rolled-up

163 100 133 0 60 120 180 240

Dec 00 Mar 01 Sep 01

131 100 ₉₆ 0 60 120 180 240

Dec 00 Mar 01 Sep 01

T ra n sa ct io n s / F T E ( In d ex ) 163 100 127 0 60 120 180 240

Dec 00 Mar 01 Sep 01

21



Top-line growth offset by conservative

provisioning



Strong asset quality and provision coverage



Stabilized interest margin and interest income



Improved efficiency in expense management



Non-interest income continues to shine

Ensuring strong capitalisation and asset

quality coverage

22

Loan-related Deposit-related Trade-related

Investment Banking Credit Card

Fund Management Stockbroking

Others Total

Fee-to-income ratio (%)

Strong fee income despite stockbroking

liberalization and weak markets

(S$ million)

(S$ million) _{9M00 9M01 Change}%

37 42 55 77 25 52 65 39 392 17.7

56 72 71 54 51 50 31 40 425 16.5

52.5 70.6 30.3 (29.7) 102.8 (3.9) (52.3) 1.3 8.5

23

Other income: FX & securities trading

doubled

Net gains on treasury activities - foreign exchange

- trading securities and derivatives Net gains on sale of government

securities and equities

Net gains on disposal of investment securities

Net gains on disposal of fixed assets Others

Total

Non-interest income to operating income ratio (%)

(S$ million)

(S$ million) _{9M00 9M01 Change}%

86 39 25 27 4 25 206 29.5

141 158 58 135 24 26 542 39.7

64.1 306.1 130.5 401.3 533.5 4.4 163.3

24

Singapore T&M DEaR

-25 -20 -15 -10 -5 0 2 /J a n/ 0 1 2 5 /J a n/ 0 1 2 0 /F e b/ 0 1 1 6 /M a r/ 0 1 1 3 /A pr /0 1 9 /M a y/ 0 1 1 1 /J un /0 1 3 /J ul /0 1 2 7 /J ul /0 1 2 2 /A ug /0 1 2 1 /S e p/ 0 1 S $m -5 -4 -3 -2 -1 0 2 /J a n/ 0 1 24 /J an /0 1 16 /F eb /0 1 14 /M ar /0 1 6/ A pr /0 1 4 /M ay /0 1 1 /J un /0 1 27 /J un /0 1 27 /J ul /0 1 28 /A ug /0 1 2 4/ S e p/ 01 S $M

 _{Singapore Treasury and Markets}

have expanded earnings while maintaining DEaR levels

Hong Kong DEaR

 _{Hong Kong has benefited from a}

significant decline in DEaR

Significant growth in Treasury & Markets

business with consistent risk profile

25



Top-line growth offset by conservative

provisioning



Strong asset quality and provision coverage



Stabilized interest margin and interest income



Improved efficiency in expense management



Non-interest income continues to shine

Ensuring strong capitalization and asset

quality coverage

Title

Sound Strategy Backed by

Strong Capitalization

Presentation to Media and Analysts November 5, 2001

THESE MATERIALS ARE NOT AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES, SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION, AND ANY PUBLIC OFFERING OF SECURITIES TO BE MADE IN THE UNITED STATES WILL BE MADE BY MEANS OF A PROSPECTUS THAT MAY BE OBTAINED FROM THE ISSUER AND THAT WILL CONTAIN DETAILED INFORMATION ABOUT THE COMPANY AND MANAGEMENT, AS WELL AS FINANCIAL STATEMENTS. "UNITED STATES" MEANS THE UNITED STATES OF AMERICA, ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES, AND THE DISTRICT OF COLUMBIA.

21



Top-line growth offset by conservative

provisioning



Strong asset quality and provision coverage



Stabilized interest margin and interest income



Improved efficiency in expense management



Non-interest income continues to shine

Ensuring strong capitalisation and asset

quality coverage

22

Loan-related

Deposit-related

Trade-related

Investment Banking

Credit Card

Fund Management

Stockbroking

Others

Total

Fee-to-income ratio (%)

Strong fee income despite stockbroking

liberalization and weak markets

(S$ million)

(S$ million)

_9M00

_9M01

_Change

%

37

42

55

77

25

52

65

39

392

17.7

56

72

71

54

51

50

31

40

425

16.5

52.5

70.6

30.3

(29.7)

102.8

(3.9)

(52.3)

1.3

8.5

23

Other income: FX & securities trading

doubled

Net gains on treasury activities

- foreign exchange

- trading securities and derivatives

Net gains on sale of government

securities and equities

Net gains on disposal of investment

securities

Net gains on disposal of fixed assets

Others

Total

Non-interest income to operating

income ratio (%)

(S$ million)

(S$ million)

_9M00

_9M01

_Change

%

86

39

25

27

4

25

206

29.5

141

158

58

135

24

26

542

39.7

64.1

306.1

130.5

401.3

533.5

4.4

163.3

24

Singapore T&M DEaR

-25 -20 -15 -10 -5 0 2 /J a n/ 0 1 2 5 /J a n/ 0 1 2 0 /F e b/ 0 1 1 6 /M a r/ 0 1 1 3 /A pr /0 1 9 /M a y/ 0 1 1 1 /J un /0 1 3 /J ul /0 1 2 7 /J ul /0 1 2 2 /A ug /0 1 2 1 /S e p/ 0 1 S $m -5 -4 -3 -2 -1 0 2 /J a n/ 0 1 24 /J an /0 1 16 /F eb /0 1 14 /M ar /0 1 6/ A pr /0 1 4 /M ay /0 1 1 /J un /0 1 27 /J un /0 1 27 /J ul /0 1 28 /A ug /0 1 2 4/ S e p/ 01 S $M



_{Singapore Treasury and Markets}

have expanded earnings while

maintaining DEaR levels

Hong Kong DEaR



_{Hong Kong has benefited from a}

significant decline in DEaR

Significant growth in Treasury & Markets

business with consistent risk profile

25



Top-line growth offset by conservative

provisioning



Strong asset quality and provision coverage



Stabilized interest margin and interest income



Improved efficiency in expense management



Non-interest income continues to shine

Ensuring strong capitalization and asset

quality coverage

Title

Sound Strategy Backed by

Strong Capitalization

Presentation to Media and Analysts

November 5, 2001

THESE MATERIALS ARE NOT AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES, SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION, AND ANY PUBLIC OFFERING OF SECURITIES TO BE MADE IN THE UNITED STATES WILL BE MADE BY MEANS OF A PROSPECTUS THAT MAY BE OBTAINED FROM THE ISSUER AND THAT WILL CONTAIN DETAILED INFORMATION ABOUT THE COMPANY AND MANAGEMENT, AS WELL AS FINANCIAL STATEMENTS. "UNITED STATES" MEANS THE UNITED STATES OF AMERICA, ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES, AND THE DISTRICT OF COLUMBIA.